FASB Established the Use of the Terms "Probable, " "Reasonably

question 94

Multiple Choice

FASB established the use of the terms "probable, " "reasonably possible, " and "remote." It adopted these terms because

• A)the available statistical techniques are not exact enough
• B)future events can vary over a wide range
• C)future gains are not easy to estimate
• D)unnecessary estimates should not be recorded in the financial records

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Definitions:

Capital Balances

The amount of equity each partner has in a partnership or the equity accounts in a corporation's balance sheet.

Capital Balances

The amounts of money or value that members or partners have contributed to a company, partnership, or organization, often reflected in equity accounts.

Withdrawal

The act of removing funds from a bank account, or taking capital out of a business by an owner for personal use.

Capital Interest

Interest attributable to the ownership or investment in a business entity or property, often reflecting the cost of financing the entity's assets.